Earnings call transcript Q4 2022

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Operator

Good morning ladies and gentlemen. Thank you for attending today's Fourth Quarter 2022 The Hartford Financial Results Webcast. My name is Alex, and I'll be your moderator for today's call. [Operator Instructions]

I would now like to pass the conference over to your host, Susan Spivak, with The Hartford Group. ahead. go please Susan,

Susan Spivak

materials thank webcast joining earnings. on and the reported and our Yesterday, today call results earnings-related of all and fourth posted our you morning, website. us for for we on Good quarter XXXX

participants call Specialty. Chief Mo Swift, Costello, Chairman are the Small Lines; Global and Officer; Commercial Middle Jonathan of For & Benefits; today Hartford; Commercial Stephanie Personal CEO Bush, The Chris Tooker, Large our today, Beth Financial and Bennett, Group and and

Just comments defined call the are Act few materially future a forward-looking Private includes be These could of XXXX. different. Reform Today's final performance begins. Chris before results and Litigation statements statements under as guarantees of actual not Securities

forward-looking the on also of uncertainties to detailed do found Investors should those and call. risks differ statements A and provided cause any not from information We assume actual consider this description risks that obligation in filings. uncertainties could to statements. results our SEC be these or can update

commentary in of the are the news supplement. these and measure Explanations comparable as GAAP include measures included and reconciliations release non-GAAP Our SEC as in to filings, financial well the financial our measures. today

no reproduced consent. form that The website this note please will available webcast transcript in be of may without for year. be on and Hartford's of Finally, this call or The conference Replays Hartford's portion one written any rebroadcast prior an official

to over now Chris. turn call the I'll

Chris Swift

and our call will after for remarks Beth joining Then XXXX of metrics, dive accomplishments. you over I today. results expectations review thank summary for full-year the prepared our of which close financial into start our to will and morning, XXXX. with and a turn to I a performance deeper I quarter key Good us Today, will fourth with and

joined by as Q&A. into be we We leaders business move our then will

objectives. Quarter-after-quarter, progress an to of the strategic the we depth quarter, of relationships. demonstrating and year outstanding strong financial our started. performance let's financial in pleased get is delivering Hartford against distribution excellent results of So, report fourth power The franchise our an capping the are

Our years, of by and benefits the commitment drive success. investments last execution few the our to superior made XX,XXX our customer over employees experience, superb significant

Strong in helped XX% growth earnings us with Benefits of deliver while earnings ratio and core capital growth competitive core income growth partnership commercial premium X% earnings returning XX% underlying investment exceptional line XX%, XX.X%, with growth results of advantages limited fixed with of margin Group XXXX, X.X%. ROE combined billion EPS with including These of XX.X. increasing of of lines X.X a core and of fully insured yields, returns an excellent shareholders. core excess of in results portfolio top to

I forward, lines, with strong we superior confident Looking all am deliver momentum results. to continue can across

Hartford of written share exposure continued increases, growth, our each and highlights me Next growth driven driven the let across our strong business. exceeding expense was in year from premium pricing In Underlying higher program. a nearly retention, few lines, commercial trends a pricing, for by Now, in loss businesses. by cost leverage margins large part strong policy driven growing by point most new earned lines improved by

while Across have industry strong commercial experience, to business with drove new positioned in consistently customer breaking us written of distribution of capabilities, be to exceptional, record commercial producing in brand, underlying XXXX. underwriting already all leading digital products continued which capabilities market and with capture Small sub-XX results combined combined ratios and margins. lines, levels premium our enhanced depth share, well or excellent maintaining improving

forward, commercial will Going remain Hartford. growth a engine small for The

property, excess market with E&S and expand of lines. and to in billion business business an capabilities the our liability we beyond lines, example, our exposures. the about in is owners, This traditional $X product market For binding continue surplus will addressable serving portion small

E&S current offering. premiums become admitted a the and strong platform, quoting destination and innovative within we for broker the evolving opportunities written leading existing expect to our to retail our $XXX With binding exceeding million, capabilities a complement

large improving quality points since In our tremendous rate underlying team and the a written approximately same X% compounded solid has the X by job In and with new done for year margins a premium grew premiums business. of over commercial, XXXX middle written XXXX, growth period. with improved XX% retention

I in believe leading continue profitable this analytics and business. well had to healthy margin, pricing data industry segmentation exceptional science driving growth positions capabilities Advancements in talent delivered us which

acquisition over Specialty, our have XXX and I'm specialty written Global Their meaningfully efforts to including million gross in billion to premium, with increase us In pleased tireless extremely the premium. X.X accomplishments E&S business strategic enabled XXXX. the size of since team's the of scale

leveraging to expand specialty the E&S and capabilities commercial our billion] lines franchise across this are further We in market. global grow [ph] [$XX

underwriting points enhanced with from execution Global of of our and XXXX, the underlying demonstrating from outstanding over and Specialty results financity, points an margin were in year prior XXXX tools, expertise the XX.X team. X XX over improving

written in Our solid XX% X% breadth the business, Ocean and Marine, casualty. in and products, XX% position, in increase a competitive global for year, written international gross reinsurance XX% premiums drove pricing, including of renewal in our

commercial flat X Standard Underneath, Lines from X.X%, growth. third workers' excluding Turning to compensation pricing. for renewal compared from increases to pricing written Workers' U.S. the average lines. property pricing, to auto and point up the Commercial positive quarter. wage quarter price driven the benefiting lines X.X%, quarter remained accelerated written renewal compensation primarily were third by

primary pricing did as D&O Specialty, cost property, Global remained in over written saw increases U.S. quarter and in public auto, with Within Wholesale higher loss excluding the renewal the in-line all mid-single-digits marine. and international third pricing company casualty, stable trends. aggregate

pressures, focus current requires public continues be with business and which to profitable D&O market the competitive rate Additionally, retaining a accounts. new discipline on

underlying is X% for auto pressure. combined written industry, elevated across in quarter the of others auto growth accelerated remain Like we in Moving experience ratios to the to lines, fourth home, and and inflationary personal the as pricing premium for resulting X% full-year. continue

with throughout filings actively year. the have responding rate We been

net with auto value quarter, fourth cost loss XX.X% the year increase, In the increases the up In and quarter. kept fourth written reflected for the we X.X averaged trends from for X.X% points renewal pricing in and filed insured rate pace XX.X% have of third through quarter. Homeowners, rates

XXXX incident earnings approximately million, the materially X.X% expectations Turning the are stable persistency core rates XXX year. quarter for XX%, Fully sales year to margin and long-term the result as the Meanwhile, increases were for X% and insured and Benefits, last of significant for up has for employer within was group from recoveries. strong and Group a X.X% our trends represents disability excess for mortality full-year declined.

an start persistency higher and with outstanding off excellent is quarter modestly sales new First results. to

We Group the dynamic product expect customer innovation, transformation, remain as Benefits marketplace accelerate. demand digital to and

and investments significant the that a roadmap we I As making position have future a going am confident will forward. result, leadership for market are clear our only today strengthen

the more the over to provide Beth commentary Now, call I to quarter. will detailed turn on

Beth Costello

in XX% Chris. reflecting ROE commercial written quarter market. along account business middle with share an core XX.X%. X% in increase and Thank were X%, market. new also exposure Written earnings in Policy diluted small core and of were in increased growth retention was In with small premium $X.XX pricing XX-month up commercial middle and million. the you, increases Core or lines, earnings for a XXX million per earnings XXX

superior The quarter combined ratio. expense fourth benefited loss results Specialty's of deliver strong lower underlying with ratio Small both XX the and continues to and earned a combined and with outstanding XX.X improved Global from an delivered a ratio of from commercial solid year ago to an XX.X commercial a it ratio improved X.X as operating middle large prior from XX.X. increases. underlying points pricing margin underlying year

injury quarter severity elevated Personal core costs, Written In pressure reflecting the to driven quarters by and The XX bodily repair increased as earnings and in as Lines, ratio X quarter, well largely of increases damage were includes XX.X, underlying pricing for for losses both points was premium million. auto reflecting home. liability physical XXXX. grew auto trends in continued the and combined prior related X%

with overall lower pricing in-line loss by The the our ratio to which X.X home, with cat mitigates marketing long-term continues points driven frequency earned remain together of high effect was decrease to of spend. were labor run increases costs, and historically levels. expectations. results averages favorable at primarily Non material In and expense weather

benefit the XXX Ian. XXX first during accident Current quarter XXX which the of in were includes occurred million million, was of million quarters the Winter XX a were reduction which that reinsurance, including losses of in to cat three Elliott commercial XX year Hurricane losses net of million catastrophes from related XXXX, lines. estimates in million Storm

and resulting was Total bond, development reductions partially year catastrophes, increases net in within liability XX worker offset general reserve by million, related prior favorable core and compensation, reserve accident commercial to in quarter, earnings primarily annual in auto. for and and million asbestos of XX million comprised in XXX in asbestos study our fourth reserves increase environmental XXX environmental. the a reserve for We million completed

a was to for primarily share and remediation filings modest to accounts. to account costs. individual estimated XXX ceded the reserves reserves in specific the leaving one resolving increase and the asbestos development the a PFAS an All the of in was an of settlement company's adverse large in remaining. XXX limit on exposures, asbestos of increase million few environmental increase was of due in in estimates cost The loss million site due The increase mainly cover, increase higher

placements renewals. like January are would Overall, I program reinsurance pleased the very season. the conditions renewal the Benefits, Group and challenging terms to of a and turning backdrop Before to our for review against with we X

and an publicly protection experience. overall were quality on book in risk and XX% speaks the our current [indiscernible] to cost increases increase of XX% a business information, aggregate compared favorable catastrophe property approximate and of which Our favorably on at with basis, based adjusted market available renewed and

not our in change up XXX on XXX coverage treaty program We Overall, property changes under to some events were for million the cat certain the also point from aggregate structure XXX provides the cover XXX attachment million. did loss There million. million, increased that of the significantly.

changes these in have deck. the summarized We slide

which with costs addition any rate limited have changes and been in from charge we program, significant already adverse reinsurance renewals. In expect rates not therefore we also do and these ratio successfully increases property to other several these also experienced impact The insured we treaties, renewed conditions. higher incorporating terms our combined catastrophe

growth lower Benefits, elevated million had core excess fully XXX prior mortality The losses Group long-term the fourth earnings year disability incidence the earnings the and quarter in of disability points X.X core from to in loss premiums. a estimated quarter, of and Turning trends. margins improved ratio insured reflect level which X.X%

the related COVID-XX fourth excluding primarily In excess due quarter in quarter. loss million were mortality to The quarter. All addition, XXX lower very to life disability ratio, favorable group in to fourth short-term XXXX. compared was compared mortality higher year points, losses as tax, of this accidental X.X the excess prior million before XX increased losses cause death experience

to Turning the months. investment XXX million. Hartford equity results rates interest core past were strong lastly, AUM, in over of Funds, and higher quarter daily reflecting due million, average lower declines were XXX primarily XX to earnings income investment market net with the And

Our fixed straight income is the higher portfolio from environments. to interest benefit continuing

limited X.X% basis The a in was excluding full-year XXXX, before the in before quarter. of XX point total returns We partnerships basis compared XXXX to X.X%. yield increase basis anticipate excluding increase XX tax portfolio partnership annualized the tax, limited third approximately portfolio points yield, to points yield, XX will by our

exceptional. which commercial the of within returns fourth income quarter quarter. the JV of portfolio, fourth full-year for was our generated by in and XXXX returns primarily partnership real equity sales XX% driven were estate XX.X% opportunistic in annualized XX.X% from Our Performance

annualized quarter. holdings in private also Our X% delivering return were a resilient, equity the

full-year, XX% XX% and return the return. private a generated generated a real For estate equity

markets. XXXX, in volatility we continued we As enter expect

and private our Given M&A slowdown activity, outlook our be we to target. a corporate below equity expect in long-term investment consumer for returns consumption,

estate costs reduced in At With a is in the and increase activity this financing real equity. in the to XXXX. X% estate and backdrop, for real expected to same JV return availability other of impact X% time, sales we partnership financing expect the investments our alternative

billion. holding of X Turning XX, December to resources company totaled as capital,

Hartford Benefits, and expect we from XXX X.X million million XXXX, of from from from Funds. companies XXX the Group P&C, operating For dividends billion

million. During shares the X.X quarter, for repurchased $XXX we million

performed the on end stakeholders. targeted billion XXXX X.XX businesses As continue well-positioned we our our of year, in all to repurchase XXXX. and value are returns strongly enhance of wrap authorization through to on deliver we for December the remaining our our have and XX, share To up,

turn now Chris. back will I it to

Chris Swift

Beth. you, Thank

written Underpinning XXXX. price are be range the a forward] our to Let's to expected book stable, growing where we In [take it with Total XXXX. XX%. the in about compared ratio commercial expanding in a compensation commercial underwriting underlying like disciplined excluding increases XXXX, combined are I'd or margins, share [ph] workers' of expecting maintaining fairly lines and thoughts to while commitment is outlook renewal prudently of XX% few to lines, business. our

in property standard severity offset price financial headwinds to increases, the with of over pricing with business. global XX% meaningful expected written the somewhat parts property, auto, book, Commercial we increases as European liability Meaningful remain cost are our and In including property pricing coverage. fairly for general expected U.S. reinsurance commercial expect lines are our competitive of during trends and stable in year. ease second some moderation is to half inflation in loss

results. specific strength our remind business, and contribution stellar compensation workers’ for you commercial trends our leading Before current I margin let market get its me overall to line into of

average years, advantages [and pricing X by the Looking XX [ph] claim] last results industry analytics, underwriting our back significant competitive our management. outperformed have ratio on sophistication, reflecting points, in approximately loss over the

data scale react line. addition, emerging growth and anticipate, we identify, to quickly and In us our trends wealth manage and in allow as to retention of this

better XX an the workers' in lines mid-XX. small performed past book our ratios combined XX, standard even average has with commercial Over compensation years, ratios our combined that's premier commercial while averaging the near book produced

equipping underlying Also ratio improvement by XXXX loss advanced a our X middle segmentation market impressive, in since point underwriters risk is tools. with accomplished

important remain and compensation earnings We to an expect to a Hartford. business The profitable highly workers' contributor

to XXXX. which be renewal wage few negative. expected as rate in to slightly be from selections long-term a unchanged to net up severity are remain forecast. Turning comprised written specifics costs is Loss average Workers' of and projected our to compensation flat pricing, growth and frequency is slightly

expertise workers' to point XXXX, lines compensation commercial We to the In use equating attractive minimize in underwriting combined X.X to will market to with margin we roughly book returns tools and selection continue our management ratio. leading deterioration in underlying remain compression. risk expect on any

underlying confident our a In and and reflects and superior within XX environment, our to to commercial of range be market ability through summary, to combined for ability extremely are an lines, manage result deliver consistently book an our a economic in of we execute variety will margins. XX ratio outstanding

renewal accelerate the Lines, underlying ratio second In and there Personal we combined remain for the XXXX a expect mid-teens auto, written to of by balance XX. to is to quarter XX range Turning the into price Loss during in expected new of expect expected business to driven to the before primarily we cost by returning to price of mid-year, year By second be adequate. are half normal the level trends, year. more first the elevated the severity, in remain half. the

with XXXX. we Homeowners, generally expect loss keep In pace cost trends throughout earned pricing to

in have this As focused re-adequacy, quality new right balancing to return Lines, confident business we navigate Overall, targeted we marketing on I period and plans productivity. business, of this across Personal the to am execution inflationary profitability XXXX. we are

losses excess for expected X% are the endemic XXXX In pandemic, this outlook our to we expect Group consistent core Benefits, business. between versus XXXX. mortality to COVID long-term state, margin from improve shifting X% margin earnings and be With with to

pricing we versus expected some However, will group incidents accordingly. in we loss mortality trends are expect settle XXXX and favorable trends. to levels group [All-in] we business ratios of recovery improve moderation life and and are [ph], pre-pandemic above recent expect disability,

equity, award in and recognition of Award I'd closing, honored achievements. efforts, catalyst driving as few The like to Catalyst and one Before for is made inclusion. global recent we two diversity, a women. share the advances of have Hartford for DE&I representation, be will winners premier inclusion The This ESG organizational year,

long commitment most of for and continue dedication recognition was standing teams. just The to every earned The inception. Gender-Equality is and to sustainability a honors both their also named testament since list our into Bloomberg the XXXX to America's hard our to receive we work Hartford The Index year having companies

demonstrate in summarize for targeted strong personal and operating In in our a closing, benefits shareholders. let investments our bullish returns, effectiveness our margins. future resulting the me businesses, benefits growth continued group One, business why lines so results of at in our I'm to back the about target of line, strategy financial margins tracking XXXX and commercial in the

driven returns as technology. our quality increasing and investment And outstanding our finally, we accretive and by centric remains managing Two, of we excess underwriting, is proactively exceptional shareholders. be to assets the talent innovative performance Three, superior result a pricing supported and customer execution, a diversified portfolio credit sustain to capability are have of culture, healthy. income capital for

factors of these contribute excitement about Hartford. All to confidence and my future the The

earnings with deliver performance ROE core of Our our never better franchise industry to stakeholders. to been range XX% a for creating positioned has XX%, financial value while all leading

over the me to for Susan Q&A. call turn Let now

Susan Spivak

please minutes asking Thank for for you XX Could the questions. you. Operator, about have instructions question. repeat a we

Operator

Instructions] UBS. Please is now for today comes Brian, question you. ahead. open. your go from first Thank Meredith Our from [Operator Brian line

Brian Meredith

Yes, here. Good thanks. questions of A morning. couple

one, Next, got through curious Hartford gets on think look half in like there looks First will see don't expense about million some about an that I maybe we XX if another ratio. point offsets expense so should in you it a make just point? to coming recognize Are it to the X.X we that XXXX. It XXXX saves

Chris Swift

thanks joining. question. Brian, for the Thanks for

You Next about and overall efficiency in point to the into does benefit program XXXX. are is – and head as I a effectiveness half right. mean we have contributing a it Hartford our

on mean, I of question I part if your assumption, you good a No. second do The we executing that's today? your that understood see sit here correctly. think is, challenges any question as to I

Brian Meredith

That's Exactly. yes. it. Yes,

the So, be I beneficial. X.X mean points should

that curious, just just pricing some you marketplace. I'm property sounds property of Obviously, pricing the curious. really capacity, a strong reinsurance in of and talk a perspective. your Chris, for from into It XXXX some could lean right the like you see I'm in accretive to then property the of advantage And markets now And perhaps results? took good. your now kind Okay, market a good right about margin growth maybe business? little capabilities, willingness bit

Chris Swift

over our of last I you property five sort picked billion. property about years Maybe to premium, we homeowners X billion one firsthand, have but be not known it's bigger key initiatives of writer. the about you, $X think Brian by premium of strategic really up on a including of

operate middle mentioned it So, as have small We capability. us. reinsurance area I growth world. end also we have my property around assumed of [ph] area for we prepared E&S focus. [bi-product] with and an some the in exposures an do property large, the of It's an developed in and a is And on remarks,

on leaning is basis will to it business an a that So, diversify primary organization forward. help a so continue That area more of going we're into. our ultimately we're book balanced

is So, it ours a focus of going forward. yes,

Brian Meredith

could squeeze If any Benefits, yet large Great. more some seeing I corporations? in. the Group Thanks. layoffs we're one you at just from of seeing are impact that

Chris Swift

I from our ask Jonathan but organizations, size would would you book global to add? Generally, comment. you mean, What then I and range a obviously business we I’ll trends middle share the Jonathan. book Bennett stable, and fairly small to organizations are of that large with have no. in

Jonathan Bennett

I premium new a had out January as we're earned we with off good definitely out fees and And growth X%, fourth over strong so to great you of start Chris. the a pointed persistency. and in you quarter, in strong with sales Point comments, said, your fourth agree quarter. what in of little about

So, on watch. the we're

and XXXX. to We we're today, as of well. But shape all where sit good looking are announcements pretty aware in we forward the happening

Brian Meredith

Great. Thank you.

Operator

Thank you.

open. line question Ward Please now go ahead. of is comes Mike, next your Our Citi. from Mike

Mike Ward

the how you is combined guys. the morning. losses headwind workers' what underlying and assuming on around to might ratio? year-over-year underlying curious I just comp. Good had say you're a I'm Thanks, big question

Chris Swift

combined so define, to and mean But to to combination Yes, a exposure my will a of medical I of long-term point I And new in better. with about our to alluded will frequency maybe the bit lines, consistent connect mean ratio. growth impact our consistent negative of prepared have slightly a thank workers, a on then dots flat some be we our a rate that ratio. and likely of little it trends, for half assumption of if you with the pure pricing And sort I as combined our that remarks, at in generally five overlay, to sort points you try best cost I renewal sized negative. this relation overall I Michael. question. that's longer-term net additional is inflation commercial

got that getting hand, the other I again, though, said in good are as expense property, in I prepared offsets improvement my measure than the see lines remarks, think of to connect we year-over-year. decline. of the if half precisely, more really and that X.X particularly point point, dots, you've auto commercial net we rate a point the it really I at more efficiencies And

Mike Ward

about loss treaties? to and under you. thank Maybe guidance, last you inflation the able relatively are the on And modestly curious Just cat similar reinsurance great. it how Okay, to keep year? higher retentions thinking

Chris Swift

Yes, I question. – again, would good

I gist think it in prepared remarks. her of said the Beth as

today. dramatically modeling risk that side. Our enjoy the reinsurance treaties particularly our sort a We're changed have exposures consistent, overall renewal. from given of with not the very we that's and And with pleased expectation,

would Beth? So, other add you any color,

Beth Costello

book. Yes. only would a look is a been thing the mean, guidance about add, I And other just we've up as if rate been of at property taking year. our talking a it last point, in was I reminder, what we've tenth you The

pressures obviously on, structure is as again, cost our significantly. the some our you program that mitigate of then cat there So to. that of Chris not to changed And commented referred

Mike Ward

Thanks, guys.

Operator

Thank you.

from now comes ahead. Peters Raymond question Please next line Our open. of is go your Greg James. Greg,

Greg Peters

everyone. morning, Good Great.

your say? talk how on into when stable. I outlook Can and in looks down would like others, and and question, it that pretty to look supplement comments retention of or on I year commercial to it In personal first like what the focus next in be both and stats you're policy for lines. factors you seems commercial should commercial the to of in the listening both that put us in retention moving about I retention your For up trends seeing might year, personal. numbers, Yet your you for at personal the this

Chris Swift

hard business, of would and margins to work principally at then Stephanie returns Sure, because it, Mo we're in the care businesses. really mean, take new color customers. Greg. say to right you sort it's, priority I And of book add their the I respective the outset ask our their improve been and our to the to generating. that hard so I might so And see acquire we of

So, It's the see customers, profitable out to take into we good have cost care with going number there's just prevent can existing and obviously of creating to of with not one opportunity. of But so you opportunities. that when to a the loss looking it's priority increases year necessary to keeps the rate going business if is, bid a trends. do pace new shopper you're to everything trying taking retain. piece generally, strategy business to customers good the most care And that's your

what small Stephanie, say you So, personal would lines? and in

Stephanie Bush

morning. Good Sure.

across the then when business you to consistent, perspective. lives share testament before principles. that our key being So, from overall and a comments being three do is believe is strong And in forums. stable, do we small commercial, other provide accurate model. these a business I I've easy with, what pricing I to which Everything Being is experience in model come and business entire into very would we really entire particularly that and really renewal that shared when that it

extended of period We consistently, auto over BOP time. and have rate particularly the taking lines the been rate, an in been measured

with continue owner. confidence business we build our so, small our and to agents And

I healthy can is strong expect continue with very see would retention of the know, And lines on. see been market still small know, there's in you to I'll commercial. as a you over you would to going and go all we've I as results, our auto, we disruption bit that in start – the personal and When space So, stable.

We will straight taking rate. have to take and XX continue rate for been quarters

somewhat overall confidence changes to terms modest offering. And lines us potentially this auto our Chris that in step to rate personal up expect a would continuing comments. referenced But year We're their stable in XXXX, overall, of Beth in prepared and overall the in very but be I so, decline it stable. gives

Chris Swift

add? you would what Mo,

Mo Tooker

echo I’d small commercial [ph]. [teams] Stephanie's Yes. many of

really books play the important the I retention commercial the role have. we what our in specialty terms middle feel an we large think and such, And of the in about both global good will quality and strategies. as of

We and really about We but more Chris comp talked pressure We're there. those has the books, quality are bit E&O. good there's watching about. of a watching the closely closely as public little the workers' feel

So, I think and again, little great feel rate a quality tactical there. them. and retention the is more books about protect we both bit of we'll But

Greg Peters

detail. that for Thanks

sense sort elevated quarter? peak we or there's approach, you that see expect up Just quarters what know again, mentioned of like to XXX.X. and I couple comments of remain guidance the these next know coming, levels your particularly follow-up as rate for opening the it then at I spiking in for auto you in profitability in your as addressed to beginning and lines trough it just for of it I'm a we're, and it sort looking in to is Stephanie fourth XXXX of fourth the really looking or happened the but do in personal I'm And at your auto, quarter. XXX.X in the combined ratio at

Mo Tooker

today. would I five that of results maybe Greg, about elevation, What Yes. half first are say, least I to Remember, going where we seasonality decline an is at have auto a see the and modest quarter. of the of we this points the from think year, sort you're [indiscernible]

of auto a XXX, leave yes, if got it's the some results XXX, do. full-year, look you at So but improvement to –

fourth year execute going think point where during improvement quarter. We're on actually I to of but to we could have the focused the that to half it, improvement will the accelerate second see margin But volume it's the we're there's happen. plans, and rate we that know – those a approved, our to regulator to a with of on work which activity of government need friends to but how magnitude hard do, get does all in relations

Greg Peters

Right. Makes sense. Thanks for the answers.

Operator

you. Thank

Our next now Greenspan Fargo. Elyse your from line is Elyse from Wells question open. comes

Elyse Greenspan

the ROE been the sounds it the color morning. the XX everything, question, in just as first and call. previously income through Chris, of more upped a pieces it the Good Appreciate it's reflection on When observations? guidance, missing but it you all to going XX. am income investment making right, Thanks. something sounds portfolio, like XX XX to I on My fixed right of improved those like

Chris Swift

our say, that joining expect in the commercial is component, prudent coming is have rate Beth that this confidence that for I we said, but guidance portfolio, you're I just maybe And NII have, of the of in lower particularly would of we would right. returns is do reactive as there do income big Elyse. think but as off think is us, book degree conditions alternative the achieving, explain also moves set, as particularly if our we we that The thoughtful, fixed improvement a I of – Thanks at underappreciated. year. interest high a midpoint. margin the underlying business that I But

I we've So, from there got the a outperform. think And record we next played track then, outperforming to that's And time. mission good over of year.

imply be don't year, our basis, is what next measured really And goes will views programs. we're guidance of going our but basis ROEs on XX about from buyback all points that think to the improvement, refined done and and our be what it says really I overall when it I does there. So, including a of into

Elyse Greenspan

and did given return, a up to I to Thanks. balanced capital know via share return of XXXX capital And guys the to this the level then [Group] you targeted expect kind higher are of be coming holdco but have, pick are guys the year. we to my dividends dividends holdco, could the up repurchase? go second question, you extra going in [ph]

Beth Costello

Yes.

characterize couple you're I been they've yes, that last from dividends kind Elyse, group increasing. been statutory mortality are lower obviously higher sort of back getting the would to of as, The because normal. years The by benefits results of losses. So have the right. impacted

our we're to of we more our which So, of normal of size when the repurchase did contemplated the we kind we share getting that evaluated update authorization. run to rate, had

just that increases to plan the in the call line would I we're to have. going totally on we continue So, execute and

Elyse Greenspan

Thank you.

Operator

Thank you.

line Please from Our question open. JPMorgan. of is now next your comes Bhullar ahead. Jimmy go Jimmy,

Jimmy Bhullar

beyond that a even look years the expecting year they over following through worse there's get pricing? and up have are pretty comp of that uptick pushback or workers' on a seems that like on to Is in two that could until question lot lot good market margins hikes where from Chris' been a signs do in to some you over of point to of think earlier. regulators reasonable you an you're to be show had I morning. one next to comments Good it allowing begin price from going the XXXX. if some this Obviously, Thanks. continue assume margins at

Chris Swift

starting a those to the principally my the Yes, less thank a in regulators in ratios, is, today, I think turn turn through hard work Again, three you're environment pricing level and ask. in various had, opening see frequencies components as where by combined joining are general, get look to question we modest think were there less usually, do and in deterioration said of on pandemic that's some filing. due trends period for But Jimmy. you back when the particularly due rate remarks, the period I emerge, is just as industry activity, economic the you I the experience our years the down in that really set us to mean, a of are I pricing asking has to

So, to experience starts XXXX, filings that your think rate if XXXX in XXXX. leave in of you

to increases So, negative bureaus allow or maybe out I'm NCCI sometime that into some can rating modest price coming be XXXX XXXX. at trends of optimistic price least heading of there reversal in other

Jimmy Bhullar

personal thoughts expense this ratio the given lower ratio quarter, loss begins [ph]? marketing ratio or loss Okay. what to the expense should a improve are declined And then the picked the assume considerably we up [year] at until on obviously, ratio lines, your over similar on next that

Chris Swift

let but that Again, add really really sort in Well, year, we – planning. sure were new could down then we differently, year an perspective? you we middle particularly gives really, marketing opportunities point to and and had XXXX we've Stephanie think I adequate really about rate a I slightly expense the as marketing, just fourth opportunity on in to think and customers me us and strategy And be cut that with into earn of in then head would this from slowed an as this side the I'll we ask the quarter to of start her time. profitable Stephanie, we us by marketing become to at that add said, though, what just make back as say

Stephanie Bush

third media and more I quarter add more was think points is really that, A marketing marketing into quarter. the late We change either other fourth underscore moved sources. Chris. the to you couple very captured yes, intentional in it well, and targeted I'd our

we be but were to Chris So, the see to spend dynamic marketing expect I majority It's source, throughout adequate of believe build and you media will we marketing marketing. year. still mid-year rate business to a new by process, in should the confirm very source states want by we mentioned, our that that as continue

business adequacy, growth that finally, would I year. start in business begin we'd see then new half to that count of And PIF with expect new the rate to back the

together. how all components work of those So, about think

Chris Swift

it But Jimmy, just flat. a basis I over to to expenses tie year relatively together, be on year would to expect all

Jimmy Bhullar

Okay. Thank you.

Operator

Thank you.

question Andrew open. next go from is your Please Suisse. line Credit now Our of Andrew, ahead. comes Kligerman

Andrew Kligerman

Good Great. morning.

next yield ex has seeing XX rates, ex Slide quarters? the over the on that there? X.X% now could bit annualized pressure yield you about your provide just LPs that of nicely annualized at any picked where to we're I of up presentation, few a X.X%, from see you LPs you but talk and insight really see Looking And going little can investment Q-over-Q investment

Beth Costello

Yes, with I'll that. start

XX as of that. just be securities at about some to full-year increase. partnerships. at prepared maturities, think just a that when think can a remarks, for like annualized things yield said It's So, and ex also fourth X.X, dividends I Is that the in about an of look things you as Think sometimes that number, look quarter, that not other highlight equities expecting or well. that When on to point you the point fixed basis basis XX items you it's I on included and my lumpy. little basis on bit in couple

where through big increase of and go basis sort run kind to I XXXX. when quarter-over-quarter, So, about a probably as continues we're not X.X rate into see going at of on ending expecting kind quarter a and QX, of we that the think

some If XXXX supplement that you and details of yield, definitely classes really the asset these through our the we'd we're just maturity can that fixed to at And fixed see in on maturities we seeing see loans. look other you line. as some investor like securities and increases mortgage financial expect of versus there go equity

So, trajectory. obviously see nice We we it as nice a quarter. had a lift this

because Was perspective, is [ph]. more cash go excess we, and did, X% some was was purchases – which average elevated. some that quarter a as Our pretty of X%, be high I'd invested that yield at a I the with up. the of securities to QX at ended just bit like that which elevated looking was little quarter a the probably points wouldn't expect from And expect around had [X.X%] we opportunistically divested like treasury bit kind we that that the norm because ended third into pretty yield helpful? January, we drove

Andrew Kligerman

period slight three four stellar Was I'm is – workers' a just pretty arms premium Hartford gotten you've helpful. it. when you much and comp. for What workers’ ratios a that that that very of down it's going Maybe Chris, it. was could to two points you I to Yes, I'm negative. mentioned how and know down, get the component heavy get trying issue this and renewal with – best-in-class points my negative? sense Hartford around that probably on that? questions already the comp in written temper. Got rate I And us give Was

on of ratios raise than best-in-class? my more that. the mid, and for trying have and small allow even a XX% will Two arms around you been you with that around rate future? rates I'm The question being just in that. better or getting for questions, regulators maybe So, part color is, then that rate to to penalize they again the outlook Will little get second the that

Chris Swift

question. Again, thanks say at anything. Andrew, better the for best-in-class it's to would be I always

there's do and increasing an rate I a details line get you and disappoint There's I going then on of with laid the really the really the that of to sub rate operating think say a lot get side. rate, nuanced that to a try said could look, that just All focus we metrics I'm is, from So, on detail lot you provided. and net we from exposures.

like is I that next be exposure year, slightly negative. going all the saying. rate So, to that's And acts was negative

Andrew Kligerman

was just quarter? maybe sales insured benefit throw that hoping one. I Maybe in a Okay. but were up detailed color expecting fully wasn't a I'll I quick on group XX%, little a products – quite the the answer, strong

Chris Swift

Yes. color. I'll his add let Jonathan

Jonathan Bennett

Sure.

In sales, our terms of yes. numbers good there, in

then numbers other the A in or lot in we health late for us see so happen you our maybe beginning continue set. two. fourth supplemental will quarter. the Sometimes in third opportunistically good us, and to numbers trades for the but I response our at of really say, would nice a quarter, some product the primarily the disability or big business And to year in quarter. sale the Strong voluntary, get some oftentimes first our of results

critical highest has hospital had And include of our programs. would for steadily building illness, sales in for number book been those now numbers and since and of a XXXX that So, those accident. us indemnity, years inception

health. So, really the are are think disability at those that I sub ones and driving

We on the but side. stronger continue life disability to self-help compete definitely effectively side, the and mix a on

Andrew Kligerman

a Okay, lot. thanks

Chris Swift

Andrew. you, Thank

Operator

Thank you.

Our Meyer, line open. next is of now KBW. your question comes Shields from Meyer

Meyer Shields

over investments talk speaking, rate can the given morning LPs Broadly you the and about interest higher to allocating years environment? Good next alternatives your [appetite] more Thanks. all. few for [ph] Great.

Chris Swift

amounts? the dollar hearing about had you a I I know don't your Meyer, of heard Beth, investment question. asking the question. you Were or time alternatives hard if if philosophy

Meyer Shields

was cash in So, less or really go I there is to the basis, on thinking it whether current more for alternatives flows LPs? plans. about appetite to just percentage a

Chris Swift

targeted generally percent. we targeted have had a to say portfolio we say And Think every slight would I would year. we our increase I our generally that alternatives. of update a

I skills in. just at deep have you'll really see a I with but think consistently performance if And of you something over time, our meaningful outperformed we change, Meyer, we've period lower think a that not longer So, look volatility. it's

got you partners and we area, real area, particularly what Beth. great side, add? from ratio in the a think I would So, But sharpen great it's pure a that trade in estate

Beth Costello

portfolio, not as captured you think increasing we've that to do but an pleased said, in a slowly it's been in our allocation very we've as but And an I look it you to been class I class overall with. really construct continue Chris meaningful that of change asset it's that, the mean, well. to. asset said,

Meyer Shields

you auto we've obviously, a this news, that. positive adverse but development quarters was had helpful. by of for commercial could I And hoping That's liability, overwhelmed talk few through is Okay. us

Beth Costello

Yes.

look perspective increase that and have closely closed So, we very we're reserves to on. experienced that line we've as large in losses a some putting looking that last at quarters have continuing we've at decided is the a our the book to there. risks It re-underwrite also through that rate and come that from several we're

judgments as So, have to reserves. nothing that specific made but just losses our reacted had I'd on we’ve that large few quarter-end a we we point to,

Meyer Shields

Thank very perfect. much. you Okay,

Operator

you. Thank

question David your next line is from comes Evercore. now open. from David, Our Motemaden

David Motemaden

morning. Hi, thanks. Good

assuming but Just cost. about question the slightly think current assuming about we talk loss a up, that cost Could maybe comp severity. And the loss about that the on side X% be I on on how negative you frequency? you're maybe think what medical you well. said that just cost Chris, should frequency had workers' just Are environment? indemnity includes expect in as you then there? you And talk to

Chris Swift

[ph], didn't year-over-year. I David. the you that loss relatively is and severity but negative – on going trends us, exposure, slightly the Medical that you frequency sort clarifying into fairly be just are Thank rate] cost those be a stable to or were number Yes. that talked slight X, and not, though territory. at changed year-over-year of I flat for rate side about a is, [excess What down give net consistent. will I joining trends

to salaries wage. upfront. charge is a increasing go indemnity then of natural comp wage workers' collect we in and from because perspective. severity of a self-balancing of collect benefit as payments it's We sort the On up XX% more for equation hedge loss indemnity my side, medical more. only And there's a of it's little that We content bit get sort

So, would I share you. with that's what

Beth Costello

points, only just a we're year-over-year, in the some medical [pretax to wouldn't negative trend a he thing Chris not that about maybe said, Yes, to clarify, relative of item trend. [ph], as said, you right? severity X as When making trend] with loss, I'll it's think result the the – referenced one again, we but other change items

So, the Chris perspective, a loss about expect pure from cost talked you'd components that results. other also overall all but then some affect increase,

David Motemaden

it. Got

guess, a you Okay. detail. And helpful. lines That's Chris, just combined I in lot you then you on, had commercial ratio of said, XX improvement expect gave and underlying points basis

expense as from to sounds expect on of that it like ratio headwind comp given from other that the the obviously to come expansion the interpretation? right by offset Is lines? you opposed workers' loss Just the most just ratio, me

Chris Swift

I half-and-half. would say

achieve. of place the point from quarter what during in the we margin. upside] to at buying ratio at expense, the point [In the as That's we're lines improvement going confident we're from [ph] commercial So, for year. point in year-over-year execute the

David Motemaden

Hello?

Chris Swift

was going I sorry, was David, mute. on no. to I say

highly during feel highly Half we're expense Again, the point overachieve of from loss And a ratio of confident confident to to misinterpreted loss half a midpoints and aim point upside there. and achieving, going a sort of ratio that. for you've of it year. we're play those improvement ratio and going to improvement. of, point think I half a call I'll a improvement on

David Motemaden

Got it.

half underlying a the loss point ratio. on So,

the that balance weighting, just guess think would everything points] the that about would expect I imply you're you take is of book I on your way I guess. [X.X of XX% to If points a I So, [ph] it? X.X to – X I and get expansion improvement. to comp, comp I just assuming if excluding Is of right guess do then

Chris Swift

time don't remember tough Yes. having I communicating. a

expense a negative total, to David, loss half improvement start then pure I year-over-year, combined improvement going years. with a expense think X.X be a we lines point the in ratio commercial of but is expecting But overall point improvement the driven ratio ratio and over comp. of by I'm in because again

a think from I clear? that is, half to highly to it And just feel said communicating And So elsewhere, that. to from And to for confident that Is you meaning it comes of we're you, means point you. that gave going comes of get half upside outperform on that loss. elsewhere. language and to I point I estimate of expense achieving got going play we my as you point we're pure

David Motemaden

your That is comments. clear. appreciate I

Operator

Thank you.

take no questions further today. for will We

for I'll So, back any hand to Susan further remarks. Spivak

Susan Spivak

and apologize I to for didn't and those but Alex. follow-up with day you, all we all are you questions, you. And us. we joining we'll your get out thank Thank reach to here

Operator

Thank you for today's joining call.

You may now your lines. disconnect

The Hartford Financial Services Group, Inc. (HIG) 3 Feb 232022 Q4 Earnings call transcript